Today Bitmain announced it’s investing in tribeOS, a startup that’s building a digital advertising marketplace. What’s unusual is the blockchain will run on Bitcoin Cash, that’s the fork, not the main Bitcoin network.
Bitmain is the world’s largest producer of ASICS chips which are used in servers for mining Bitcoin and Bitcoin Cash.
Matt Gallant, CEO of tribeOS, commented: “When industry leaders like Bitmain invest in a blockchain-based advertising platform like tribeOS, it signals a paradigm shift, not only in ad tech but for the entire online advertising industry.”
If you know a little about Bitcoin Cash one of the first questions should be: Isn’t it too expensive to run an ad network? Ad networks are one of the most traffic intensive applications. And because Bitcoin Cash uses mining, it has not-insignificant transaction fees. But tribeOS plan to do most of the heavy lifting off-chain. Some other ad networks such as Lucidity plan to do likewise, though not using Bitcoin Cash.
For any startup thinking about creating a blockchain application, there are many networks from which to choose. Bitcoin Cash isn’t usually on the list. There’s even some irony because Bitcoin fans – so-called Bitcoin Maximalists – often contend that using Bitcoin as money is the only real blockchain application. It’s an understatement to say that Bitcoin Maximalists are not fans of Ethereum. But tribeOS is somewhat like an Ethereum app.
Digital advertising challenges
The advertising sector has serious problems. tribeOS is focusing on the fraud issue. They claim that humans do not generate 61.5% of web traffic. They’re probably right because a lot of API traffic goes over the web. And they claim 77% of display ads are never seen. That’s likely since many display ads are initially outside of the viewing area. Most of all they assert on their website that 20%-90% of ad clicks are fraudulent. Given the range, it’s hard to argue with that.
The startup claims to have created a revolutionary ad fraud system called AdShield. “AdShield establishes an impenetrable first line of defense against click farms, spambots, and ad fraud rings. A recent eight-month beta test delivered impressive results where AdShield successfully blocked more than one billion instances of ad fraud.”
Besides fraud, the hottest issue for advertisers is the fact that 50% plus of their ad dollars go to intermediaries. For those significant advertisers, they may view tribeOS as just another middleman. Hence IBM is working with the likes of Kellogg, Kimberly-Clark, Pfizer, and Unilever on a blockchain-based network called MediaOcean.